Greece hails Moody's upgrade as 'vote of confidence'

ATHENS: Greece on Saturday hailed Moody's upgrade of the country's credit rating as a "strong vote of confidence" even as the country enters a second lockdown in response to rising coronavirus infections.

The rating agency lifted Greece's long-term debt rating by a notch on Friday from B1 to Ba3 with a stable outlook, although the vital tourism industry is suffering through the virus outbreak.

"Moody's upgrade of Greece's rating, which came in the midst of a global recession, is a strong vote of confidence in the growth prospects of the Greek economy post-Covid", Greek Prime Minister Kyriakos Mitsotakis tweeted Saturday.

The boost follows an upgrade of Greece's debt rating by the Fitch agency in January.

Moody's pointed to the country's growth outlook for next year as well as progress in tax compliance, strengthening institutions and fighting corruption.

"Favourable growth prospects, combined with a return to a prudent fiscal stance, will lead to a gradual reversal in the public debt trend," Moody's wrote in its report.

The Greek economy is expected to contract by 9.0 percent this year before booking 5.0 percent growth in 2021 and 3.5 percent in 2022, the European Commission said in its Autumn Economic Forecast on Thursday -- the same day Mitsotakis announced the return to lockdown.

In the report, the EU's executive agency said that "Greece has been severely affected by the COVID-19 pandemic as the large services sector and the dependency on international tourism make it particularly vulnerable to shocks triggered by travel restrictions and social distancing measures".

It added though that "a swift policy response has helped cushion the impact on employment and businesses so far" and that "economic activity in 2021 is expected to be supported by the additional fiscal measures presented in the draft budget".